Conflict Resolution: Dynamic Analysis of Interpersonal Systems

BY NICOLE LAU

Conflict is not a static problem—it's a dynamic system of two (or more) people locked in reinforcing feedback loops. Person A blames, Person B defends, Person A escalates, Person B withdraws, Person A pursues harder. Traditional conflict resolution focuses on "who's right"—but systems thinking reveals that conflict is not about content (the issue), it's about process (the feedback loops that perpetuate it).

This case study demonstrates how to resolve deep interpersonal conflict using Dynamic Divination Modeling Theory—analyzing a workplace conflict between co-founders, revealing the hidden feedback loops driving escalation, and designing interventions that break the cycle and restore collaboration.

The Case: Sarah & Michael - Co-Founder Conflict

Background

Sarah, 41, CEO (Technical background)
• Co-founded tech startup 5 years ago
• Owns 55% equity
• Personality: Direct, data-driven, impatient
• Strength: Execution, product vision
• Weakness: People skills, empathy

Michael, 43, COO (Business background)
• Co-founded with Sarah (former colleagues)
• Owns 45% equity
• Personality: Diplomatic, relationship-focused, cautious
• Strength: Team building, partnerships
• Weakness: Decisiveness, conflict avoidance

Company status:
• Revenue: $5M/year, growing 40%/year
• Team: 25 employees
• Funding: Series A ($3M raised)
• Investors: Pressuring for faster growth

The Conflict (Month 0)

Surface issue: Disagreement over hiring VP of Sales

Sarah's position: Hire aggressive sales leader, move fast, hit growth targets
Michael's position: Hire culture-fit candidate, preserve team harmony, sustainable growth

Deeper pattern (past 6 months):
• Every decision becomes a battle
• Sarah: "Michael is too slow, risk-averse, blocking progress"
• Michael: "Sarah is reckless, doesn't value people, creating toxic culture"
• Team: Caught in middle, morale declining
• Investors: Concerned about founder conflict

The Crisis Point

Trigger event: Board meeting (Month 0)
• Sarah and Michael openly argued in front of investors
• Investor pulled Sarah aside: "Fix this or we'll replace one of you"
• Michael to Sarah after meeting: "Maybe we should just split the company"

The Question

"Can this partnership be saved? If so, what needs to change systemically? If not, how do we separate without destroying the company?"

Stakes

• $5M company at risk
• 25 employees' livelihoods
• $3M investor capital
• 5-year friendship destroyed
• Personal reputations in industry

Phase 1: Conflict System Analysis

Tarot Conflict Spread (14 cards, 7 for each person)

Sarah's Perspective:
1. Current feelings: Five of Wands (+2) — Frustration, fighting
2. Needs: Three of Wands (+7) — Vision, expansion, progress
3. Contribution to conflict: Seven of Swords (-4) — Bypassing Michael, undermining
4. Hidden fear: Five of Pentacles (-6) — Fear of failure, losing everything
5. Path to resolution: Ace of Swords (+8) — Truth, clarity, direct communication
6. What must release: The Emperor (-5) — Need for total control
7. Potential outcome: Six of Pentacles (+6) — Fair exchange, balance

Michael's Perspective:
8. Current feelings: Two of Swords (0) — Stalemate, avoidance, paralysis
9. Needs: Four of Cups (+3) — Respect, consideration, being heard
10. Contribution to conflict: Four of Pentacles (-5) — Holding on, resistance to change
11. Hidden fear: Three of Swords (-7) — Heartbreak, betrayal, loss of friendship
12. Path to resolution: Temperance (+8) — Balance, compromise, integration
13. What must release: The Hanged Man (-3) — Martyrdom, passive-aggressive waiting
14. Potential outcome: Two of Cups (+7) — Renewed partnership, mutual respect

Quantified analysis:
• Both have legitimate needs (Sarah: progress +7, Michael: respect +3)
• Both contributing to conflict (Sarah: undermining -4, Michael: resistance -5)
• Both have deep fears (Sarah: failure -6, Michael: betrayal -7)
• Resolution possible (Sarah: Ace of Swords +8, Michael: Temperance +8, outcomes +6/+7)

I Ching Conflict Consultation (3 readings)

Reading 1 (Current state): Hex 6 (Conflict) → Hex 47 (Oppression)
Interpretation: In conflict now, will worsen to oppression if not addressed

Reading 2 (If separate): Hex 23 (Splitting Apart) → Hex 2 (Receptive)
Interpretation: Painful split, but both would find new paths (receptive to new partnerships)

Reading 3 (If resolve): Hex 38 (Opposition) → Hex 63 (After Completion)
Interpretation: Opposition is natural (different styles), but can reach completion through integration

Convergence:
• Hex 6 (Conflict) = Current reality, not imagined
• Hex 47 (Oppression) = Will get worse without intervention
• Hex 38 → 63 = Resolution possible through accepting opposition as complementary

Synastry Astrology (Compatibility Analysis)

Sarah's chart: Sun in Aries, Moon in Capricorn, Mars in Leo
Michael's chart: Sun in Libra, Moon in Cancer, Mars in Pisces

Key aspects:
• Sarah's Sun (Aries) opposite Michael's Sun (Libra) = Fundamental polarity (action vs. harmony)
• Sarah's Mars (Leo) square Michael's Mars (Pisces) = Conflict in action styles (direct vs. indirect)
• Sarah's Moon (Capricorn) trine Michael's Sun (Libra) = Emotional-identity harmony (some compatibility)
• Michael's Moon (Cancer) square Sarah's Sun (Aries) = Emotional needs vs. identity clash

Interpretation:
• Core compatibility: 55% (some harmony, significant tension)
• Main challenge: Sun-Sun opposition (opposite approaches to everything)
• Strength: Moon-Sun trine (emotional understanding possible)
• Conflict style: Mars-Mars square (incompatible ways of fighting)

Phase 2: Conflict Causal Loop Diagram

Loop 1: The Escalation Spiral (Currently Dominant)

Structure:
Sarah pushes for decision → Michael resists/delays → Sarah feels blocked → Sarah bypasses Michael → Michael feels disrespected → Michael digs in harder → Sarah pushes harder → (loop closes)

Polarity analysis:
+ - + + + + + = 1 negative link (odd)
Wait, let me retrace: Push → Resist → Feel blocked → Bypass → Feel disrespected → Resist more → Push more
Actually: + (-) + + (-) + + = 2 negative links (even)
Loop type: R- (Reinforcing, Vicious)
Behavior: Each cycle intensifies—Sarah pushes harder, Michael resists more. Exponential escalation.

Loop 2: The Trust Depletion Cycle (Reinforcing Decline)

Structure:
Conflict → (-) Trust → (+) Defensiveness → (+) Misinterpretation → (+) More conflict → (loop closes)

Loop type: R- (Reinforcing, Vicious)
Behavior: As trust depletes, everything is interpreted negatively, creating more conflict, depleting more trust. Death spiral.

Loop 3: The Complementary Partnership (Not Active, But Possible)

Structure:
Sarah's vision → (+) Michael's execution → (+) Company success → (+) Mutual respect → (+) Trust → (+) Sarah's vision (enhanced by Michael's input) → (loop closes)

Loop type: R+ (Reinforcing, Virtuous)
Potential: Their differences are complementary (Aries/Libra opposition), not incompatible. If trust restored, differences become strengths.

Leverage points:
1. Bypass behavior (highest leverage): Sarah must stop going around Michael
2. Passive resistance (second leverage): Michael must stop delaying decisions
3. Trust restoration (third leverage): Both must rebuild through consistent actions

Phase 3: Stock-Flow Conflict Model

Trust Stock (Relationship Capital)

Current level: 2/10 (severely depleted)
Inflows:
• Positive interactions: 0.5 trust/week (rare, minimal)
• Shared wins: 0 (no collaboration currently)
• Vulnerability/repair: 0 (no attempts)
Total inflow: +0.5 trust/week

Outflows:
• Conflicts: -2 trust/week (frequent)
• Bypassing/undermining: -1.5 trust/week
• Passive-aggressive behavior: -1 trust/week
Total outflow: -4.5 trust/week

Net flow: -4 trust/week (catastrophic depletion)

Projection: At -4/week, trust hits zero in 2 weeks → Irreparable damage, separation inevitable

Decision Quality Stock

Current level: 4/10 (poor decisions due to conflict)
Impact:
• Hiring delayed (VP Sales position open 4 months)
• Strategy unclear (Sarah and Michael pulling different directions)
• Team confused (mixed messages from leadership)

Projection: Poor decisions accumulate, company performance suffers, investors lose confidence

Team Morale Stock

Current level: 5/10 (declining)
Impact of founder conflict:
• Employees taking sides
• Uncertainty about company direction
• Key employees considering leaving

Projection: If conflict continues, morale hits 3/10 in 2 months → Talent exodus begins

Critical insight: Trust stock is the binding constraint. At current depletion rate (-4/week), have 2-week window to intervene before irreversible damage.

Phase 4: Sensitivity Analysis - What Resolves Conflict?

Variable Impact on Conflict Resolution Probability

Highest sensitivity (±50% impact on resolution):
1. Sarah stops bypassing Michael: Respecting process → +55% resolution probability
2. Michael stops passive resistance: Making timely decisions → +50% resolution probability

Medium sensitivity (±25% impact):
3. Structured communication: Weekly alignment meetings → +30% resolution probability
4. Third-party mediation: Executive coach/therapist → +25% resolution probability

Low sensitivity (±10% impact):
5. Personality compatibility: Fixed (55%), can't change → +5% (learning to work with differences)
6. Equity split: 55/45, not the real issue → +3% (red herring)

Critical insight: Behavioral change (stop bypassing, stop resisting) is 10-20x more important than personality compatibility or equity structure. Process, not content, is the problem.

Phase 5: Scenario Analysis

Scenario A: Status Quo (No Intervention)

Projection (3 months):
• Trust: Hits zero in 2 weeks
• Month 1: One founder forced out by board (likely Michael, as Sarah has more equity)
• Month 2: Remaining founder struggles alone, company culture damaged
• Month 3: Key employees leave, growth stalls
• Outcome: Company survives but weakened, friendship destroyed

Probability: 70% (default trajectory without intervention)

Scenario B: Mediated Resolution

Intervention:
• Hire executive coach (specializing in co-founder conflict)
• Weekly mediation sessions (3 months)
• Implement structured decision-making process
• Both commit to behavioral changes (Sarah: no bypassing, Michael: timely decisions)

Projection (6 months):
• Month 1-2: Difficult, conflicts surface but mediated
• Month 3-4: New patterns emerging, trust rebuilding
• Month 5-6: Collaboration restored, complementary strengths leveraged
• Trust: 2/10 → 7/10
• Decision quality: 4/10 → 8/10
• Team morale: 5/10 → 8/10

Probability of success: 60% (requires both parties' commitment)

Scenario C: Conscious Uncoupling (Structured Separation)

Intervention:
• Acknowledge incompatibility with respect
• Negotiate separation (Michael exits, Sarah buys out his equity over 3 years)
• Michael stays as advisor (6 months transition)
• Preserve friendship, professional reputation

Projection (12 months):
• Month 1-3: Negotiation, legal agreements
• Month 4-9: Transition period, Michael as advisor
• Month 10-12: Sarah as sole CEO, new COO hired
• Outcome: Company continues, friendship preserved, both move forward

Probability: 30% (if mediation fails)

Scenario Convergence

Convergence: All scenarios require immediate intervention (2-week window)
Divergence: Stay together (Scenario B) vs. separate (Scenario C)
Robust pattern: Status quo is not an option—change is inevitable

Phase 6: Multi-System Convergence & Decision

Should they try to resolve or separate?

Tarot:
• Resolution cards (Ace of Swords +8, Temperance +8, outcomes +6/+7) = TRY to resolve
• But both must release (Emperor -5, Hanged Man -3) = Requires change

I Ching:
• Hex 38 → 63 (Opposition → After Completion) = Resolution possible
• Hex 23 → 2 (Splitting → Receptive) = Separation also viable
• MIXED signal = Genuine choice point

Astrology:
• 55% compatibility = Workable but challenging
• Sun-Sun opposition = Complementary if integrated, conflictual if not

Stock-flow:
• Trust depletion critical (2-week window) = URGENT intervention required
• Either resolve OR separate, but decide NOW

Sensitivity:
• Behavioral change is highest leverage = Resolution possible IF both commit

Convergence: 50% — Systems split, indicating genuine choice (not predetermined)

Interpretation of 50% Convergence

Low convergence means this is a bifurcation point—the outcome depends on their choices, not fate. Either path (resolve or separate) is viable. The key is making a conscious choice and committing fully.

Phase 7: The Resolution Process (Scenario B Chosen)

Week 1-2: Crisis Intervention

Actions:
• Hired executive coach (specializing in founder dynamics)
• Emergency session: Both agreed to 3-month mediation trial
• Ground rules established:
1. Sarah: No bypassing Michael on decisions
2. Michael: 48-hour decision deadline (no indefinite delays)
3. Both: Weekly mediation sessions, daily check-ins
4. Both: Commit to 3 months before deciding to separate

Trust stock: Stabilized at 2/10 (stopped depleting)

Month 1-2: Surfacing & Restructuring

Mediation insights:
• Sarah's fear: "If I slow down, we'll fail" (Five of Pentacles)
• Michael's fear: "If I speak up, she'll push me out" (Three of Swords)
• Both realized: Fighting the same enemy (fear of failure), not each other

Structural changes:
• Decision matrix created: Sarah decides (product, tech), Michael decides (people, culture), both decide (strategy, hiring execs)
• Weekly alignment meeting: 2 hours, structured agenda
• Conflict protocol: If disagree, 24-hour cooling off, then mediated discussion

Trust stock: 2/10 → 4/10 (small wins rebuilding trust)

Month 3-4: New Patterns Emerging

Breakthrough moment (Month 3):
• VP Sales hire: Used new process, found candidate both loved
• Sarah: "Michael's caution saved us from bad hire"
• Michael: "Sarah's urgency kept us moving"
• First time in 6 months: Felt like partners, not adversaries

Loop shift:
• Loop 1 (Escalation) weakening
• Loop 3 (Complementary Partnership) activating
• Trust stock: 4/10 → 6/10

Month 5-6: Integration & Thriving

Results:
• Trust: 6/10 → 7.5/10
• Decision quality: 4/10 → 8/10 (best decisions in company history)
• Team morale: 5/10 → 8.5/10 (employees noticed the shift)
• Revenue: Accelerated (new VP Sales + aligned leadership)
• Investor confidence: Restored

Sarah's reflection: "Our differences are our strength. I push, Michael balances. We need both."

Michael's reflection: "I was so afraid of conflict, I created more conflict by avoiding. Now I speak up sooner."

Phase 8: Validation & Learnings

Tarot validation:
• Predicted both must release (Emperor, Hanged Man) = ACCURATE (Sarah released control, Michael released martyrdom)
• Predicted resolution possible (Ace of Swords +8, Temperance +8) = ACCURATE (achieved through truth and balance)
• Predicted outcomes (+6/+7) = ACCURATE (partnership restored, stronger than before)

I Ching validation:
• Hex 38 (Opposition) → Hex 63 (After Completion) = ACCURATE (integrated opposition into completion)
• Hex 6 → 47 (Conflict → Oppression if not addressed) = ACCURATE (would have worsened without intervention)

Stock-flow validation:
• Predicted 2-week window before irreversible damage = ACCURATE (intervened Week 1-2, prevented collapse)
• Predicted trust depletion rate (-4/week) = ACCURATE (was on track to zero)

Sensitivity analysis validation:
• Predicted behavioral change (stop bypassing, stop resisting) most important = ACCURATE (these changes drove resolution)
• Predicted personality compatibility less important = ACCURATE (55% compatibility was workable once process fixed)

Key Conflict Resolution Learnings

1. Conflict is about process, not content
The VP Sales hire was a symptom. The real issue was the escalation loop (bypassing → resistance → escalation).

2. Trust is a stock that depletes faster than it accumulates
Stock-flow showed -4/week depletion, only +0.5/week accumulation. Breaking negative loops is more urgent than building positive ones.

3. Complementary differences become strengths when trust exists
Astrology showed Sun-Sun opposition (Aries/Libra). With trust, this became "push and balance." Without trust, it was "reckless vs. weak."

4. Behavioral change > Personality change
Sensitivity analysis showed changing behaviors (±50% impact) far more important than changing personalities (±5% impact).

5. Low convergence = Genuine choice point
50% convergence meant the outcome wasn't predetermined. Their commitment to the process determined success.

6. Mediation works when both parties commit
Scenario B (60% success probability) manifested because both Sarah and Michael fully committed to the 3-month process.

7. Conflict resolution has a time window
Stock-flow revealed 2-week window before irreversible damage. Timing matters—intervene early or separate cleanly.

This is conflict resolution through systems analysis—not about who's right, but about breaking the loops that perpetuate conflict. From escalation to integration, from adversaries to partners, from crisis to collaboration. This is how you resolve interpersonal conflict dynamically.